CAPITAL CITY ENERGY GROUP,
INC.
NON-QUALIFIED STOCK OPTION AWARD
AGREEMENT
THIS AWARD AGREEMENT (this “
Agreement ”) is made as of December 31, 2008
(the “ Grant Date ”), between
Capital City Energy Group, Inc., a Nevada corporation (the “
Company ”), and Joseph Sites ( the “
Participant ”).
1. Option
Grant . Effective as of the Grant Date, the Company
hereby grants to the Participant an option (the “
Option ”) to purchase 920,000 shares of the
Company’s common stock (the “ Common Stock
”). The exercise price of the Option will be $1.80
per share (the “ Exercise Price
”). The Option is a non-qualified stock
option. Subject to the vesting and termination of
service provisions in Section 2, the Option will expire and cease
to be exercisable on the fifth anniversary of the Grant
Date.
2. Vesting
. Provided that the Participant remains employed by the
Company or any of its Subsidiaries or Affiliates as of on the
relevant date, the Option shall vest and become exercisable as
follows:
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Percent of
Option Vested and Exercisable
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After the first
anniversary of the Grant Date, and on or prior to the second
anniversary of the Grant Date:
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After the
second anniversary of the Grant Date, and on or prior to the third
anniversary of the Grant Date:
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After the third
anniversary of the Grant Date, and on or prior to the fourth
anniversary of the Grant Date:
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3. Exercise of
Option; Payment. Upon a termination of the
Participant’s employment or other service with the Company
and all of its Subsidiaries and Affiliates for any reason, the
Participant shall forfeit any portion of the Option which has not
vested and the Participant, or, in the event of the
Participant’s death or Disability, the Participant’s
heirs or other legal representatives, as applicable, shall have
until the earlier of (i) ninety (90) days following the date of
such termination or (ii) the expiration of the Option, to exercise
any vested portion of the Option. Subject to vesting and
other restrictions provided for hereunder, the Option may be
exercised, and payment in full of the aggregate Exercise Price
made, by a Participant (or, if applicable, by the
Participant’s heirs or other legal representative) only by
written notice (in the form prescribed by the Company) to the
Company specifying the number of shares to be
purchased. The aggregate Exercise Price shall be paid in
full upon the exercise of the Option. Payment must be
made by (i) cash or a certified or bank cashier’s check; (ii)
shares of previously owned Common Stock having an aggregate Fair
Market Value on the date of exercise equal to the aggregate
Exercise Price; (iii) through the withholding by the Company from
the Common Stock otherwise to be received, with such withheld
Common Stock having an aggregate Fair Market Value on the date of
exercise equal to the aggregate Exercise Price; or (iv) by any
combination of such methods of payment.
4. Restrictions on
Transfer . The Option granted hereunder are not
transferable by the Participant. The Participant
acknowledges and agrees that the Option may not be sold,
transferred, gifted, donated, pledged, hypothecated, disposed of or
assigned by the Participant.
5. Securities Laws
Restrictions . The Participant represents that the
Option and the Common Stock issued upon exercise of the Option (the
“Option Shares”) are for the Participant’s own
account and not on behalf of others. The Participant understands
and acknowledges that federal, state and foreign securities laws
govern and restrict the Participant’s right to offer, sell or
otherwise dispose of the Options and the Option Shares unless the
Participant’s offer, sale or other disposition thereof is
registered under the Securities Act and federal, state and foreign
securities laws or, in the opinion of the Company’s counsel,
such offer, sale or other disposition is exempt from registration
thereunder. The Participant agrees that the Participant will not
offer, sell or otherwise dispose of the Options or the Option
Shares in any manner which would: (i) require the Company to file
any registration statement (or similar filing under applicable
securities law) with the Securities and Exchange Commission or to
amend or supplement any such filing or (ii) violate or cause the
Company to violate the Securities Act, the rules and regulations
promulgated thereunder or any other applicable securities
law. The Participant further understands that the
certificates for any Option Shares will bear such legends as the
Company deems necessary or desirable in connection with the
Securities Act or other rules, regulations or laws.
6.
Participant’s Representations . The
Participant hereby represents and warrants to the Company that (i)
the execution, delivery and performance of this Agreement by the
Participant does not and will not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order,
judgment or decree to which the Participant is a party or by which
the Participant is bound and (ii) upon the execution and delivery
of this Agreement by the Company, this Agreement shall be the valid
and binding obligation of the Participant, enforceable in
accordance with its terms. The Participant hereby acknowledges and
represents that the Participant has consulted with (or has had an
opportunity to consult with) independent legal counsel regarding
the Partic
